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U.S. Secretary of State Hillary Clinton (L) and outgoing Israeli Prime Minister Ehud Olmert smile during a meeting in Jerusalem March 3, 2009.

RAMALLAH, West Bank (Reuters) – U.S. Secretary of State Hillary Clinton criticized Israel Wednesday over plans to demolish Palestinian homes in Arab East Jerusalem and said Washington would engage Israeli leaders on Jewish settlements.

Calling the planned destruction of more than 80 dwellings “unhelpful,” Clinton said after talks with Palestinian leaders: “It is an issue that we intend to raise with the government of Israel and the government at the municipal level in Jerusalem.”  Israel says the homes slated for demolition were built without permits.

Palestinians say authorization from Israel’s Jerusalem municipality is nearly impossible to obtain. They accuse Israel of trying to drive them out of East Jerusalem, territory captured in a 1967 war, to make room for Jewish families.

Israel considers all of Jerusalem its “united and eternal” capital, a claim that has not won international recognition. The Palestinian Authority wants East Jerusalem to be the capital of a Palestinian state.

At a news conference with Palestinian President Mahmoud Abbas in the occupied West Bank, Clinton stopped short of repeating U.S. calls for an immediate cessation of Israeli settlement expansion but promised to follow up on the issue.

“We will be looking for a way to put it on the table along with all the other issues that need to be discussed and resolved,” she said.

“I think at this time, we should wait until we have a new Israeli government. That will be soon and then we will look at whatever tools are available,” Clinton said repeating her support for creation of a Palestinian state alongside Israel.

PEACE PARTNERS

Abbas said that unless Israel’s incoming leaders were committed to a two-state solution and halted settlement construction and Jerusalem demolitions, “we will not consider them as peace partners.”

Secretary of State Hillary Clinton and Palestinian President Mahmoud Abbas hold a joint news conference in the West Bank city of Ramallah March 4, 2009

Clinton is on her first visit to the region as secretary of state during a time of political transition in Israel, which held an election on February 10 that led to right-winger Benjamin Netanyahu being invited to form a government by April 3.

The Likud party leader’s reluctance to commit himself to the creation of a Palestinian state could put him on a collision course with the Obama White House.

With Israel still in political flux and peace talks with the Palestinians stalled, Clinton used her Middle East visit to announce Tuesday a new approach to improve U.S. relations with Syria.

She said two U.S. officials would go to Damascus for preliminary discussions. Political analysts said the overture could pave the way for a resumption of Israeli-Syrian negotiations and weaken Syria’s ties with Iran and Palestinian and Lebanese militant groups.

In a show of support for Abbas’s Palestinian Authority, Clinton called it the only legitimate government of the Palestinian people.

The Authority has held sway only in the West Bank after Hamas Islamists wrested control of the Gaza Strip from his Fatah faction in fighting in 2007.

The West shuns Hamas over its refusal to recognize Israel, renounce violence and accept existing interim peace deals.

Clinton has said a durable ceasefire in the Gaza Strip, where Israel in December launched a devastating 22-day offensive, hinged on Hamas stopping cross-border rocket salvoes.

U.S.'s top diplomat, who lays a wreath at Jerusalem's Yad Vashem Holocaust Memorial, left, says administration will vigorously pursue state's creation.

JERUSALEM – Secretary of State Hillary Clinton said Tuesday the new U.S. administration will vigorously pursue the creation of a Palestinian state, stressing that movement toward Palestinian independence seems “inescapable.”

Clinton also said the U.S. would soon send two envoys to Syria for “preliminary conversations.” It was the most significant sign yet that the Obama administration is ready to mend relations with the Damascus regime. The U.S. withdrew its ambassador in 2005, accusing Syria of supporting terrorism.

“We have no way to predict what the future with our relations concerning Syria might be,” she told a Jerusalem news conference. “There has to be some perceived benefit of doing so for the United States and our allies and our shared values. But I think it is a worthwhile effort to go and begin these preliminary conversations.”  Clinton, making her first visit to the region as secretary of state, made her comments ahead of a meeting with Benjamin Netanyahu, Israel’s prime minister designate. Netanyahu’s past criticism of peace talks and opposition to full Palestinian independence has raised concerns that his incoming government could clash with the U.S.

‘Vigorously engaged’
When asked about Netanyahu, she acknowledged the possibility of disagreements with the hawkish Israeli politician and made clear the U.S. will push forward with its efforts to forge a peace deal that includes the creation of an independent Palestinian state alongside Israel.

“The United States will be vigorously engaged in the pursuit of a two-state solution every step of the way,” she said. “The inevitability of working toward a two state-solution is inescapable.”

Ahead of their meeting, Netanyahu showed signs of backing off his previous pledges to abandon the current round of peace talks, launched in November 2007 at a U.S.-hosted summit.

That message would mark a change in the Likud leader’s long-stated position that peace talks are a waste of time because of the weakness of the Palestinian leadership. He has suggested in the past he would instead invest in the Palestinian economy while continuing Israel’s military occupation of the West Bank indefinitely.

And Clinton signaled that open confrontation with Israel is unlikely, stressing the close relationship between the two countries and saying Israel must ultimately decide what is in its best interests.

“We happen to believe that moving toward the two-state solution, step by step, is in Israel’s best interests. But obviously it’s up to the people and the government of Israel to decide how to define your interests,” she said.

Rocket attacks criticized
Clinton also stressed the “unrelenting” U.S. commitment to Israel’s security. Clinton specifically criticized continuing rocket attacks out of the Hamas-controlled Gaza Strip.

“There is no doubt that any nation, including Israel, cannot stand idly by while its territory and people are subjected to rocket attacks,” she said at an earlier news conference with Israel’s ceremonial president, Shimon Peres.

Netanyahu, leader of the hardline Likud Party, is putting together a new coalition government after right-wing and Orthodox Jewish parties won a majority of seats in last month’s Israeli parliamentary election. He is expected to be sworn in as prime minister within weeks.

His criticism of U.S.-led Mideast peace talks during the recent election campaign — along with his reliance on small hardline partners — has raised fears that his government could clash with the Obama administration.

Netanyahu planned to tell the secretary of state that his government will continue peace talks with the Palestinians, a lawmaker from Netanyahu’s Likud Party said.

“I think that Hillary Clinton, when she comes today, will find Benjamin Netanyahu prepared to continue to hold negotiations, not only on economic projects but also political negotiations, a political process,” said Likud lawmaker Silvan Shalom, a former foreign minister.

Tense relations with Syria
In Damascus, the U.S. Embassy announced that Jeffrey Feltman, the State Department’s top diplomat for the Middle East, would lead the American delegation headed to the Syrian capital.

Embassy spokeswoman Katherine Vandevate said the visit aims to build on his “substantive and constructive” meeting last month with Syria’s ambassador in Washington, Imad Moustapha.

U.S.-Syrian relations have long been tense, particularly since the U.S. ambassador was pulled out by the Bush administration in 2005 to protest Syria’s suspected role in the assassination of former Lebanese Prime Minister Rafik Hariri. Damascus denied involvement but in the uproar that followed was forced to withdraw its troops from Lebanon, ending a 29-year dominance.

The United States has also criticized Syria for supporting militant groups such as Hamas and Hezbollah and has accused Syria of not doing enough to prevent foreign fighters from crossing into Iraq. Syria has said it is doing all it can to safeguard its long, porous border.

Clinton arrived in Jerusalem Monday evening from the Egyptian Red Sea resort of Sharm el-Sheik, where she pledged $900 million in U.S. aid at an international donors conference for rebuilding the Gaza Strip after Israel’s recent offensive against its Hamas rulers.

A packed schedule of meetings with Israeli leaders in Jerusalem included talks with Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni. On Wednesday, she is to call on Palestinian President Mahmoud Abbas in the West Bank.

SHARM EL-SHEIK, Egypt – U.S. Secretary of State Hillary Rodham Clinton is calling for urgent action by Arabs, Israelis and the international community to break the cycle of Mideast violence and to move toward a comprehensive peace in the troubled region.

Clinton delivered remarks at a conference raising money for humanitarian assistance to the Gaza Strip and boosting the Palestinian economy.  Clinton said the United States was pledging $900 million. She gave no breakdown of the funds, but her spokesman, Robert A. Wood, said on Sunday that it included $300 million in humanitarian aid for Gaza and about $600 million in budget and development aid to the Palestinian Authority, which is based in the West Bank.

Wood said that while all of the money is subject to approval by Congress, the intent is to provide about $200 million to help the Palestinian Authority shore up a budget shortfall and another $400 million to assist Palestinian institutional reforms and economic development. Wood said some of the $400 million might wind up aiding Gaza, but he said that would depend on the Palestinian Authority.

Some portion of the $900 million total U.S. pledge had already been budgeted for 2009, Wood said, adding that he could not immediately provide a breakdown.

Clinton said the Obama administration is committed to engaging vigorously and intensively in the Mideast to push for a durable peace.

U.S. considers Hamas a terrorist group
Getting U.S. humanitarian aid quickly to Gaza is complicated by the U.S. refusal to funnel it through the Hamas militant movement that rules Gaza. The United States considers Hamas a terrorist organization. Wood said the U.S. aid that does not go directly to the Palestinian Authority would be funneled to Gaza through international organizations and agencies.

Clinton arrived at Sharm el-Sheik after an overnight flight from Washington and went quickly into a meeting with the Obama administration’s Middle East peace envoy, George Mitchell, who is touring the region.

Clinton also will visit Israel and meet with Palestinian leaders in the West Bank, including Palestinian President Mahmoud Abbas.

Donors at the Sharm el-Sheik conference will be asked to fund a $2.8 billion reconstruction plan put together by Abbas’ prime minister, Salam Fayyad, an internationally respected economist. Hamas, which controls Gaza and does not recognize Israel’s right to exist, was not invited.

Some aid to go into Gazans bank accounts
Fayyad wants most of the money funneled through his West Bank-based government. He already administers huge sums of foreign aid — $7.7 billion for 2008-2010 — and has been sending $120 million to Gaza each month for welfare and salaries of Abbas’ former civil servants. Other aid, such as for rebuilding homes, would go directly to the bank accounts of Gazans.

Hamas prepared its own 86-page Gaza reconstruction plan and sent copies to the Arab League. But even if bypassed by the donors, as is likely, Hamas would benefit from any aid that eases pressure on it to help the needy.

Israel’s offensive to halt Hamas rocket fire from Gaza ended with a cease-fire Jan. 18.

South Korean children walk by military displays in Seoul as intelligence reports claim the North are gearing up to test-fire a missile capable of reaching the U.S.

SEOUL, South Korea – North Korea said Tuesday it is preparing to shoot a satellite into orbit, its clearest reference yet to an impending launch that neighbors and the U.S. suspect will be a provocative test of a long-range missile.

The statement from the North’s space technology agency comes amid growing international concern that the communist nation is gearing up to fire a version of its most advanced missile — one capable of reaching the U.S. — within a week, in violation of a U.N. Security Council resolution. North Korea said last week that it has the right to “space development” — a term it has used in the past to disguise a missile test as a satellite launch. When it test-fired a shorter-range Taepodong 1 missile over Japan in 1998, it claimed to have put a satellite into orbit.

Medium-range missile deployed

The report comes a day after South Korea’s Defense Ministry said that North Korea recently deployed a new type of medium-range ballistic missile capable of reaching northern Australia and the U.S. territory of Guam.  The new medium-range ballistic missile can travel at least 1,800 miles (3,000 kilometers), which would put the Pacific island of Guam, the northern tip of Australia and much of Russia and India within striking distance, the ministry said in a defense assessment of North Korea issued every two years.

It did not offer any other details on the new missile, including exactly when or how many missiles have been deployed and where their launching grounds are located.

The new missile is believed to be the same type displayed at a military parade in North Korea in 2007. The communist nation has been developing the missile since the late 1990s, the report said.

Barrage of insults

North Korea is reportedly preparing to test-fire its longest-range missile the Taepodong-2 - that could hit the US mainland - increasing tensions with South Korea.

Relations have been tense since South Korean President Lee Myung-bak took office a year ago, calling on the impoverished North to honor its commitment to disable its nuclear program and refusing to give it unconditional aid.

North Korea’s state media have been churning out near-daily criticism of Lee, calling him a “traitor” and “human scum.” On Monday, the North’s main Rodong Sinmun newspaper accused Lee of driving the Koreas “to the brink of a war.”

Media reports say the longer-range missile being readied for launch could be an advanced version of the Taepodong-2 that could reach even farther than Alaska to the U.S. west coast.

North Korea’s missile program is a major security concern for the region, along with its nuclear weapons development.

The country test-launched a Taepodong-2 missile in 2006, but it plunged into the ocean shortly after liftoff.

That test alarmed the world and gave new energy to the stop-and-go diplomacy over North Korea’s nuclear program, though the North is not yet believed to have mastered the miniaturization technology required to put a nuclear warhead on a missile.

North Korea also has shorter-range Scud and Nodong missiles capable of hitting neighboring South Korea or Japan.

South Korea would be the most likely target of the Scuds, which have a range of up to 310 miles, while Japan would be the likely focus for Nodongs. The North is believed to have more than 1,000 Nodong and Scud missiles in its arsenal.

North Korean leader Kim Jong Il (2-L) inspecting Korean People's Army Navy Unit 155 at an undisclosed location.

Also beefing up troops, navy
The defense report called North Korea a “direct and serious threat” and noted an increase in its troops. About 180,000 of the North’s 1.19 million troops are special warfare forces trained for nighttime, mountain and street fighting — up from 120,000 reported two years ago, it said.

The move shows the North is prepared for various types of attacks on the South in case of war, the report said.  It also said North Korea has been beefing up its navy, bolstering submarines and developing new ground-to-ship and ship-to-ship missiles and torpedoes amid concerns it may provoke an armed clash in waters near its disputed sea border with South Korea.

The report said North Korea is believed to have secured about 88 pounds of plutonium — thought to be enough to make six or seven nuclear bombs — and conducted an atomic test in 2006.

It did not give an estimate of the number of atomic bombs North Korea has, dropping a reference in a previous report that said the North is believed to have built one or two nuclear weapons.

Former U.S. Defense Secretary William Perry told a forum in Seoul on Monday that he supported a dialogue to reduce tension on the Korean peninsula but was opposed to giving in to the North’s saber rattling.

“I believe that we should continue to talk, but under no conditions should we show any signs of weakness under North Korean provocations,” said Perry, who headed the Pentagon during a 1994 nuclear standoff with North Korea.